How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 485.49

+1.8%

Nov 26 3:59 PM EST

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To: Wizard who wrote (8523)	6/18/1998 5:46:00 PM
From: Reginald Middleton	Read Replies (1) of 74651

<ok, so your analysis indicates that a quarterly earnings figure does not correlate well with the market value of the company on the date of release.I haven't seen the data so I can't know but are you implicitly saying that the relationship of a stock to its earnings (the P/E - although based on 1 quarter rather than forward or trailing 12 months) has a less consistent relationship as cap/sales, cap/book, adjcap/cashflow etc...? > Yes. Forward/estimate numbers were run as well, but can not be published due to copyright concerns. They showed less correlation with market value than book value and sales, in general. We have been toying with lagging the market value figure by one day to compensate for the release of EPS data after hours. There are a lot of "ifs" and "what ifs" to contend with, but the general trend should remain the same. EPS (as opposed to earnings) actually mean a lot if companies are attempting to boost earnings via alternative methods (ex. IBM's stock buyback programs) in lieu of increased operating performance.

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